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Investing.com - Truist Securities lowered its price target on Microchip Technology (NASDAQ:MCHP) to $60.00 from $64.00 on Friday, while maintaining a Hold rating on the semiconductor stock. Currently trading at $53.48, Microchip is rated as fairly valued according to InvestingPro analysis, which assigns the company an overall financial health score of "Fair."
The price target reduction follows Microchip’s modest beat in the current quarter, offset by disappointing guidance for the next quarter that fell below consensus expectations and indicated a quarter-over-quarter decline. InvestingPro data reveals that Microchip has not been profitable over the last twelve months, with a diluted EPS of -$0.45 and a challenging P/E ratio of -158.24.
Truist noted that Microchip’s results reflect "ongoing stabilization" in the semiconductor market rather than a strong recovery, with management characterizing current challenges as a "speed-bump" before a larger recovery expected in calendar year 2026. Despite current challenges, analysts tracked by InvestingPro predict the company will return to profitability this year with an EPS forecast of $1.51 for FY2026.
The research firm’s recovery model for Microchip assumes $6 billion in sales, 40% operating margin, and $3.55 earnings per share, which at a 17x price-to-earnings multiple yields the new $60 price target.
Truist also reduced its calendar year 2026 EPS estimate for Microchip to $2.53 from $2.63, suggesting the firm believes the recovery is already priced into the stock at current levels.
In other recent news, Microchip Technology Inc . reported its second-quarter fiscal 2026 earnings, which slightly exceeded analysts’ expectations. The company achieved non-GAAP earnings per share of $0.35, surpassing the anticipated $0.34. Revenue for the quarter was in line with forecasts, reaching $1.14 billion, representing a 6% sequential growth. Despite these positive earnings results, the company’s stock experienced a decline in after-hours trading, attributed to broader market volatility and sector-specific challenges. These recent developments highlight the company’s steady growth in earnings and revenue, offering insights for investors.
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